Xilinx buoyed by strong new products sales

SAN FRANCISCO—Programmable logic vendor Xilinx Inc. forecast a sequential sales increase for the current quarter after reporting fiscal third quarter that exceed analysts' expectations.

Xilinx (San Jose, Calif.) reported a declining profit amid sluggish macroeconomic conditions, but said it was encouraged by strong sales of new products in the fiscal third quarter.

Ian Ing, an analyst Lazard Capital Markets, said in a report circulated Friday (Jan. 18) that Xilinx' lower than forecasted revenue for the quarter was offset by savings from selling a building and tax benefits. "We believe the weak results in comms and data center supports our view that it remains too early to rotate from wireless into comm infrastructure," Ing wrote.

But Ing said Xilinx benefited from an improvement in its industrial business due largely to increased U.S. defense spending. Ing said this trend also bodes well for other chip suppliers, including Triquint Semiconductor Inc. and RF Micro Devices Inc. Ing maintains a ranking of "neutral" on Xilinx' stock.

Xilinx reported sales of $509.8 million for the quarter, down 6 percent from the previous quarter and essentially flat with the year-ago quarter. The company reported a net income for the quarter of $103.6 million, down 16 percent from the previous quarter and down 18 percent from the year-ago quarter.

Xilinx said sales of new products—included Virtex-7, Kintex-7, Artix-7, Zynq-7000, Virtex-6 and Spartan-6 devices—increased by 17 percent sequentially and 79 percent year-over-year. New products accounted for 25 percent of Xilinx' revenue in the quarter, up from 20 percent the previous quarter and up from 14 percent in the year-ago quarter.

"Strength from new products is an encouraging sign in the face of macroeconomic conditions that remained challenging during the quarter," said Moshe Gavrielov, Xilinx president and CEO, in a statement.

For the current quarter, which closes in March, Xilinx said it expects sales to be between $520 million and $540 million, which would represent an increase of 2 to 6 percent sequentially.

"Exiting calendar 2012, I believe we have the strongest product portfolio in our history, a generation ahead of the competition," Gavrielov said. "Our 28-nm products have gained significant momentum across a broad base of applications with clear leadership in performance, power and integration."